Investors interested in stocks from the Internet - Software sector have probably already heard of MiX Telematics Limited (MIXT) and Mimecast (MIME). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both MiX Telematics Limited and Mimecast are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MIXT currently has a forward P/E ratio of 26.94, while MIME has a forward P/E of 163.61. We also note that MIXT has a PEG ratio of 1.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MIME currently has a PEG ratio of 8.18.
Another notable valuation metric for MIXT is its P/B ratio of 3.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MIME has a P/B of 14.78.
Based on these metrics and many more, MIXT holds a Value grade of B, while MIME has a Value grade of D.
Both MIXT and MIME are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MIXT is the superior value option right now.
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MiX Telematics Limited (MIXT): Free Stock Analysis Report
Mimecast Limited (MIME): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
